During the 89th Thessaloniki International Fair, the Greek Prime Minister Kyriakos Mitsotakis announced several property tax changes that directly affect primary residence owners and potential foreign buyers. If you own a home or plan to buy property in Greece, here’s what you need to know about the new tax measures announced in early September 2025.
Greece property tax changes explained
ENFIA Property Tax Relief for Village Homeowners
There is good news for those owning a property in a small town or village in Greece with 1,500 or fewer inhabitants. As the Greek Prime Minister announced, in 2026, owners of a primary residence in such areas will see a 50% reduction in their yearly property tax (ENFIA). By 2027, this tax will be entirely eliminated for this category of homeowners. This measure will benefit property owners in 12,720 Greek villages. It’s worth noting that this relief applies only to primary residences, not holiday houses or second homes, and aims to support communities outside major cities.
Keep in mind that a primary residence is a property that constitutes a person’s main and permanent place of residence.
Simplified Rental Income Taxes Starting 2026
More and more property owners are choosing to rent out their homes, either on a long-term or short-term basis, to secure extra income. A new intermediate rate announced by the Greek government for a group of these owners aims to make the tax scales more straightforward.
According to the Greek Prime Minister’s announcement, rental income between €12,001 and €24,000 will be taxed at a lower rate starting from 2026. Until 2025, rental income between €12,001 and €35,000 is taxed at 35%. Under the new rules that will take effect in 2026, a new rate of 25% will be implemented, creating a fairer and smoother tax scale.
| Annual Income from Rentals | 2025 | 2026 |
| €0-€12,000 | 15% | 15% |
| €12,001-€24,000 | 35% | 25% |
| €24,001-35,000 | 35% | 35% |
| €35,001+ | 45% | 45% |
For example, if you earn €20,000 from the rent of your house, your tax is going to be like this:
- Currently (2025):
€12,000 × 15% = €1,800
€8,000 × 35% = €2,800
Total: €4,600
- From 2026:
€12,000 × 15% = €1,800
€8,000 × 25% = €2,000
Total: €3,800
- Benefit: €800
These rental income tax rates apply per property owner. This means that if a home has two owners (for example, a couple who bought a property together), both owners will benefit individually.
Additionally, for those who earn no more than €12,000 annually from rentals, the first €5,000 of rental income from a primary residence will be taxed at a reduced rate of either 5% or 7%, instead of the standard rate of 15%.
Lower VAT for Border Islands
If you are living in one of the smaller border islands, you will also benefit from lower VAT rates. As announced by Prime Minister Mitsotakis, the VAT will be reduced by 30% in 2026 for all border islands with a population of up to 20,000 residents. Previously, this measure applied only to five islands. It is now being extended to dozens of areas such as the Northern Aegean, the Dodecanese and Evros.
More specifically, the islands that will be included in the reduced VAT-rate are:
| Municipality | Prefecture | Population |
| Lipsi | Dodecanese | 778 |
| Tilos | Dodecanese | 746 |
| Agathonisi | Dodecanese | 202 |
| Chalki | Dodecanese | 475 |
| Megisti | Dodecanese | 584 |
| Kalymnos | Dodecanese | 17,752 |
| Nisyros | Dodecanese | 1,048 |
| Patmos | Dodecanese | 3,283 |
| Symi | Dodecanese | 2,603 |
| Karpathos | Dodecanese | 6,567 |
| Kasos | Dodecanese | 1,223 |
| Astypalaia | Dodecanese | 1,376 |
| Limnos | Lesvos | 16,411 |
| Agios Efstratios | Lesvos | 257 |
| Ikaria | Samos | 8,843 |
| Fournoi | Samos | 1,343 |
| Oinousses | Chios | 911 |
| Psara | Chios | 420 |
| Samothrace | Evros | 2,596 |
VAT Exemption for New Constructions
Though not officially announced yet, the 24% VAT rate on newly built homes is not expected to apply in 2026 either. Under the current rules, constructors can request an exemption from VAT for specific projects within certain periods. The suspension of VAT on new construction started in 2020 and has been extended every year since.
Essentially, this means that instead of 24% VAT, new properties are subject only to 3.09% transfer tax, making it easier and more affordable to buy a brand-new home. For the buyer, this translates into significant savings, as VAT is much higher than the property transfer tax.
Property Tax Changes at a Glance
In summary, the measures announced in September 2025 include:
– Lower yearly property taxes for small-town homeowners
– A reduction of tax rates for rental income between €12,001-€24,000
– A lower VAT rate for border islands and a VAT-exemption for new constructions
Ultimately, through these new measures, large groups of property owners in Greece will benefit. Whether you’re a current homeowner or planning to buy in Greece, these tax changes can help you plan your property budget and rental income for 2026 and beyond. For a complete guide about property taxes in Greece, see the related Elxis blog, updated for 2025.
